BFSI Firms Constituted 29% Of Total Leasing In Office Sector

CBRE South Asia Pvt. Ltd report highlighted that office leasing activity across 9 cities increased by 33% Y-o-Y and touched 15.8 mn. sq. ft. during the Jul-Sep’23 period. 

The share of Banking, Financial Services and Insurance (BFSI) firms constituted 29% of total leasing in office sector during the quarter. Mumbai, Bangalore and Hyderabad dominated the absorption in Jul-Sep ’23 period, collectively accounting for about 60% of the transaction activity.

The BFSI firms’ leasing share surged from 16% in the Apr-Jun’23 quarter to 29% during the Jul-Sept’23, driven by significant deal closures by global capability centres of BFSI corporates, while Indian banks and insurance firms continued to expand their footprint in the country.

During the Jul-Sep’23 quarter, leasing activity was also driven by technology companies, comprising a 23% share, followed by engineering and manufacturing companies (10%), life sciences firms (10%), flexible space operators (8%), and research, consulting, and analytics firms (7%). American and domestic firms equally lead the absorption in Jul-Sep ‘23 period with a share of 42% each.

In the Jul-Sep’23 period, the total office space supply across 9 cities surged to 19.3 million sq. ft., recording a 94% Y-o-Y increase. Bangalore, Hyderabad and Pune dominated new completions in Jul-Sep’23 with a share of 77%. The non-SEZ sector remained at the forefront of development completions in the quarter (Jul-Sep’23), increasing its share from 75% in the previous quarter (Apr-Jun) to 95%. According to the report, highlighting the ongoing sustainability commitment of developers, over half (53%) of the completed projects in Jul-Sep ‘23 period were green-compliant and received green certifications, such as LEED or IGBC.

Small-sized (less than 10,000 sq. ft.) to medium-sized (10,000 – 50,000 sq. ft.) transactions drove office space take-up in Jul-Sep ‘23 with a share of 86%, which was largely stable on a quarterly basis. The share of large-sized deals (more than 100,000 sq. ft.) saw a slight uptick, from 6% in the previous quarter to 7% in the Jul-Sep ‘23. Bangalore and Hyderabad took the lead in large-sized deal closures during the quarter, with Chennai and Delhi-NCR following suit. A few other such transactions were also reported in Pune and Mumbai.